Acknowledgements Thanks to Laura Hillis (Investor Group on

Climate Change), Ryan Cook and Nicolette

Boele (Responsible Investment Association

Australasia) and Monica Richter (World Wide

Fund for Nature and the Science Based

Targets Initiative) for kindly reviewing this

report. We also thank the superannuation

funds listed for reviewing and providing

feedback on information about their climate

commitments and actions.

This report is part of a series of Net Zero

Momentum Tracker assessments focusing

on sectors within the Australian economy.

Net Zero Momentum Tracker is a

ClimateWorks Australia and the Monash

Sustainable Development Institute initiative

that demonstrates progress towards net

zero greenhouse gas emissions in

Australia. It brings together and evaluates

climate action commitments made by

Australian businesses, governments and

other organisations.

Achieving net zero emissions prior to

2050 is a key element of the Paris Climate

Agreement (UNFCCC 2015) to limit global

temperature rise to well below 2 degrees

Celsius above pre-industrial levels, and to

strive for 1.5 degrees.

SUMMARY

Super sector moves on emissions, as funds commit to net zero Superannuation is an influential component of

Australia’s economy and a significant and

growing source of investment in domestic

assets. Within the next 20 years, superfunds

could dominate domestic shareholdings, with

collective ownership of up to 60 per cent of

shares in the Australian Securities Exchange

(ASX) (Deloitte 2019).

The long-term investment horizons of

superannuation funds make them acutely

vulnerable to the systemic disruptions

associated with climate change. As investors

in Australia’s largest companies, including big

corporate emitters, superannuation funds can

play an important role in Australia’s economic

decarbonisation (PRI 2020a).

There are indications this sector is starting to

transition. Conscious of the commercial

implications of climate risks and of regulatory,

legislative and policy requirements for action,

institutional investors are acting to address the

likely impacts of global warming. Under

pressure from regulators and customers,

many are emphasising engagement activities,

such as asking the companies in which they

invest to disclose – and, in some cases,

address – their climate risks. Superannuation

funds are themselves making commitments to

reduce emissions funded through their

investment portfolios, a further sign of

gathering momentum for change.

Much more, however, remains to be done.

This Superannuation Sector report highlights

the actions of 20 Australian superannuation

organisations, and the commitments they

have made to address emissions funded

through their investments. It evaluates their

alignment with the goal of net zero emissions

by 2050, a key element of the Paris

Agreement. The analysis focuses on the

1 First State Super changed their brand to Aware Super in September 2020.

largest Registrable Superannuation Entity

Licensees, based on the value of assets

under management (APRA 2019).

It finds that, despite the economic

repercussions of the COVID-19 pandemic,

efforts by Australian superannuation funds to

address climate change risks are accelerating.

Our analysis found 20 per cent of superfunds assessed have targets, or have expressed an aspiration, to achieve net zero emissions by 2050 for their investment portfolios, of which:

● Three (Cbus, HESTA and UniSuper) have committed to achieve net zero by 2050 across their entire portfolio.

● One (Aware Super, formerly First State Super1) has expressed an aspiration to transition its portfolio towards net zero by 2050.

The analysis found the majority – 12 funds

representing 60 per cent of those assessed –

are engaged in a range of activities to reduce

portfolio emissions intensity, but these are not

yet aligned with net zero by 2050. Twenty per

cent have no portfolio emissions reduction

targets or commitments.

This study highlights the importance of

engagement in transitioning portfolios towards

net zero. At present, the strategies adopted

by most funds are centred on investee

engagement rather than the setting of net

zero targets. In addition to encouraging

greater disclosure from the companies in

which they invest, some funds now ask the

biggest emitters in their portfolios to align their

strategies with the goals of the Paris

Agreement through initiatives such as Climate

Action 100+. Further, more funds are

increasing their investments in clean energy;

more are divesting from fossil fuels

(Mazengarb 2019; Zhou 2019). From 2020,

for instance, both HESTA and Aware Super

started divesting from thermal coal companies

as part of their longer-term targets to reduce

emissions within their portfolios (First State

Super 2020; HESTA 2020).

In the past few months, several Australian

superfunds have announced important

commitments to reduce emissions across their

whole portfolios.

In June 2020, HESTA made a commitment to

reduce emissions funded through its

investment portfolio by 33 per cent by 2030,

and to net zero by 2050 (HESTA 2020). In

August, Cbus gave a similar commitment

(Cbus 2020a) and in September, UniSuper

followed suit, committing to achieve net zero

absolute carbon emissions in its investment

portfolio by 2050 (UniSuper 2020). These

announcements align with the benchmark

established by the Net-Zero Asset Owner

Alliance, the members of which have

committed to transition their investment

portfolios to net zero by 2050 and are now

working on methodologies and strategies that

can achieve such an outcome (NZAOA 2020;

PRI 2020b).

The superannuation funds that have pledged

to reach net zero by 2050 across their entire

portfolios have set an important precedent.

Achieving net zero emissions for the super

sector depends on more Australian funds

following this lead.

CONTEXT

Australia has one of the largest pension

(superannuation) markets in the world (Tang

2020; Willis Towers Watson 2020). As such, it

comprises an influential component of the

Australian economy. In March 2020, 180

superfunds were managing assets with a

pooled value of $2.7 trillion (APRA 2020a,

2020b, ASFA 2020). This figure amounts to

one and a half times Australia’s GDP, and

could grow to $5 trillion or more by 2030

(Mather 2020). In 2018, superannuation funds

owned almost half of Australia’s shares (Davis

2019). It is anticipated they will collectively

own up to 60 per cent of ASX-listed equity by

2040 (Deloitte 2019).

A significant proportion of superannuation

investments support Australia’s largest

companies, including big corporate emitters,

yet many superfunds are also proactively

investing in green technologies and initiatives

(Grieve 2020). This contradictory dynamic

makes the sector an important stakeholder in

Australia’s transition to a net zero economy.

Australian superannuation funds – and

institutional investors more broadly –

increasingly recognise the likely impacts of

climate change. The sentiment has been

fostered by an acknowledgement of the

commercial implications of the physical,

transitional and litigation risks of global

warming, coupled with rising expectations

related to disclosure of these risks (IGCC

2020; KPMG 2020; RIAA 2019).

Physical risks arise from more frequent and

extreme weather events that devalue assets

such as property and infrastructure.

Transitional risks are incurred through

ongoing investment in fossil fuel dependent

sectors, since these face asset devaluations

and increased business costs as the global

economy shifts to net zero emissions

(KnowledgeBank 2020). Litigation risks

related to climate change have grown in

recent years, with legal cases in Australia

nearly as frequent as those in the United

States (Peel 2020). Indeed, a landmark case,

brought against an Australian superannuation

fund by a customer claiming the fund is failing

to protect his retirement savings from the

financial implications of climate change, could

set a worldwide precedent for how pension

funds manage climate change-related

financial risks (Khadem 2020).

Pressure continues to grow from shareholders

(ACCR 2019) and regulators for institutional

investors to identify and disclose these

different risks, through frameworks such as

the Taskforce on Climate-related Financial

Disclosures (TCFD). Within the last 12

months, both the Australian Securities and

Investments Commission (ASIC) and the

Australian Prudential Regulation Authority

(APRA) have issued guidance for

organisations encouraging the use of the

TCFD’s framework to disclose how they are

evaluating and responding to climate-related

risks and opportunities (APRA 2020c; ASIC

2019; KPMG 2020).

To reduce exposure to climate-related risks,

some Australian financial institutions are

divesting from fossil fuel companies,

particularly those that produce or use thermal

coal. Many institutional investors are focusing

on engagement with the companies they

invest in: primarily to seek greater disclosure,

but more recently, to encourage

decarbonisation (Jones 2020a; Regnan 2019).

Thirteen of the funds featured in this report

(AustralianSuper, AMP, Aware Super, BT,

CareSuper, Cbus, HESTA, Macquarie,

Mercer, QSuper, Sunsuper, TelstraSuper,

UniSuper) are signatories to Climate Action

100+, an investor initiative that advocates for

engagement with ‘the world’s largest

corporate greenhouse gas emitters’ to

encourage them to ‘take necessary action on

climate change’ (Climate Action 100+ 2020a).

This includes commitments from boards and

senior management to reduce greenhouse

gas emissions across their value chain, in line

with the goals of the Paris Agreement.

Ten of the superfunds we have analysed

(AustralianSuper, Aware Super, CareSuper,

Cbus, HESTA, Hostplus, QSuper, REST,

TelstraSuper, UniSuper) are members of the

Australian Council of Superannuation

Investors (ACSI 2020). ACSI engages with

companies on behalf of its members to

influence their ESG performance. Such

engagement includes encouraging companies

to identify climate risks and disclose the

strategy, metrics and targets they use to

manage them through frameworks such as

the TCFD. This, ACSI says, facilitates an

acceleration of change ‘by pushing companies

towards best practice reporting and

management of climate risk’ – and, in some

cases, can entail setting emissions reduction

and efficiency targets for short- and medium-

term timeframes, with the view of achieving

net zero emissions by 2050.

Members of the UN-convened Net-Zero Asset

Owner Alliance, which include some of the

world’s largest pension funds and insurers,

have set an important precedent by

committing to transition their investment

portfolios to net zero by 2050 through their

work with corporates, asset managers and

policy makers (PRI 2020b). In August 2020,

Cbus became the first Australian financial

institution to join this alliance.

The challenges experienced by Australians in

2019 and 2020 – droughts, floods, fires and

the COVID-19 pandemic – are likely to

transform the Australian economy in ways that

will necessarily affect the superannuation

sector. Market shocks, reduced contributions

associated with rising unemployment, and the

release of funds to those in need (as per new

government policy) will likely result in funds

losing value and may foster greater industry

consolidation through fund mergers (KPMG

2020).

Expectations that the economic repercussions

of the pandemic would derail investor climate

change actions and commitments have,

however, so far proved largely unfounded.

Internationally, there are even signs that fall-

out from the virus has galvanised investor

resolve to appropriately mitigate the even

greater potential economic impacts of climate

change (Tigues 2020). For instance, the

Institutional Investors Group on Climate

Change (including its regional members, the

Asia Investor Group on Climate Change,

Ceres, and the Investor Group on Climate

Change), CDP, the Principles for Responsible

Investment and the UNEP Finance Initiative

have signed a statement sent to G20

countries and New Zealand encouraging

global governments to factor climate change

risk into economic recovery plans (Investor

Agenda 2020a).

In the wake of the COVID-19 outbreak, some

Australian superannuation funds have

continued to raise the ambition of their climate

commitments. In June, HESTA became

Australia’s first superannuation fund to set a

portfolio-wide target of net zero by 2050

(HESTA 2020). The following month, Aware

Super committed to reduce emissions in its

listed equities portfolio by at least 30 per cent

by 2023 and advocate for an economy-wide

45 per cent reduction in greenhouse gas

emissions by 2030 (First State Super 2020).

In August, Cbus announced a net zero by

2050 portfolio target, supported by a

commitment to reduce portfolio emissions by

45 per cent by 2030 (Cbus 2020a). In

September, UniSuper followed suit,

committing to achieve net zero absolute

carbon emissions in its investment portfolio by

2050 (UniSuper 2020).

Superannuation funds are also among other

influential Australian finance and industry

sector representatives calling for the federal

government to commit to a net zero by 2050

target and to invest sustainably to stimulate

post pandemic economic recovery (Foley

2020; Jones 2020b; Morton 2020; Pupazzoni

2020).

AustralianSuper is the Investor

Representative for Climate Action 100+ for

Australia and New Zealand (Climate Action

100+ 2020b), and a founding partner of the

Australian Industry Energy Transition

Initiative, working directly with companies to

reduce supply chain emissions in hard-to-

abate sectors (ClimateWorks Australia 2020).

ANALYSIS

The Net Zero Momentum Tracker assessed

the pledges, commitments and activities of 20

Australian superannuation organisations to

evaluate their degree of alignment with

achieving net zero emissions by 2050.

The analysis focused on the largest 20

Registrable Superannuation Entity Licensees,

based on the value of assets under

management (APRA 2019) (Figure 1).

Table 1 illustrates each superannuation

organisation’s net zero ambition, based on the

pledges, commitments and activities that

address emissions associated with each

fund’s investment activities – the material

emissions for this sector. These emissions are

often referred to as portfolio or financed

emissions.

Table 2 provides the results from a more

granular assessment of each organisation’s

portfolio emissions intensity reduction

activities and initiatives under six asset

classes. These asset classes are: equities

(shares in listed companies), private equity,

fixed interest, infrastructure, property and

agriculture and forestry. The activities

considered by the assessment include:

decarbonisation commitments addressing

specific asset classes (net zero property

portfolio commitments for example);

investments in low carbon technologies and

initiatives; divestment; and investee

engagement. Engagement activities are

acknowledged as aimed at reducing portfolio

emissions intensity when this is explicitly

stated. They are not evaluated as equivalent

to setting a portfolio or asset class-wide net

zero or interim emissions reduction target, as

they are usually focused on a small number of

companies or assets within an asset class.

The data used for this analysis, and additional

detail on the analysis approach, is provided in

the appendix.

Of the 20 superannuation organisations

assessed:

● Three (Cbus, HESTA and UniSuper) have commitments targeting portfolio emissions that are ‘fully aligned’ to net zero by 2050. Cbus is targeting net zero portfolio emissions by 2050 via a 45 per cent reduction in portfolio emissions by 2030. HESTA has committed to develop a Climate Change Transition Plan that will reduce its portfolio carbon emissions by one-third by 2030, and to net zero by 2050. UniSuper is committed to achieve net zero absolute carbon emissions in its

investment portfolio by 2050, supported by interim goals and strategies.

● One (Aware Super) has expressed an aligned aspiration – to ‘seek to transition towards achieving net zero emissions by 2050’.

● One (AMP) is partially aligned, since it has a net zero by 2030 target for its property portfolio.

● Eleven funds have made commitments or are undertaking activities that will reduce portfolio emissions intensity, but these are not aligned with net zero by 2050.

● Four funds have made generic expressions of acknowledgement or intent regarding climate change, but have no commitments or initiatives that will reduce the emissions intensity of their portfolios.

FIGURE 1: Distribution of superannuation

organisations assessed by net zero ambition – where

the bubble size is proportional to assets under

management.

TABLE 1: ASSESSMENT OF NET ZERO AMBITION

The superannuation organisations listed are the 20 largest Registrable Superannuation Entity (RSE) Licensees, based on

the value of assets under management, reported in APRA’s annual fund-level superannuation statistics, June 2019 (APRA

2019). The assessment of net zero ambition is informed by Table 5 in the appendix. The organisations in each ambition

group are ordered by assets under management.

Portfolio Net Zero Ambition

Total assets ($’000)

RSE Licensee

★ $ 83,242,826 UniSuper

★ $ 53,818,727 HESTA

★ $ 53,168,127 United Super (Cbus)

■ $ 103,129,286 Aware Super (First State Super)

▲ $ 73,471,882 AMP Superannuation (N.M Superannuation)

● $ 217,104,324 Commonwealth Superannuation Corporation

● $ 172,409,105 AustralianSuper

● $ 115,308,453 QSuper

● $ 93,213,920 BT

● $ 72,584,595 Sunsuper

● $ 58,156,117 REST

● $ 46,043,000 Hostplus

● $ 27,507,746 Mercer Superannuation (Australia)

● $ 22,713,920 Macquarie Investment Management Limited

● $ 22,458,172 TelstraSuper

● $ 19,915,651 CareSuper

o $ 103,232,405 Nulis Nominees (Australia)

o $ 86,837,976 Colonial First State Investments Limited

o $ 39,351,565 OnePath Custodians

o $ 30,176,327 I.O.O.F. Investment Management

Fully aligned The organisation has a target to achieve net zero by 2050 across its entire portfolio, supported by a strategy and/or interim targets.

Closely aligned The organisation has a target to achieve net zero by 2050 across a significant proportion of its portfolio, supported by a strategy and/or interim targets.

Aligned aspiration/ pathway

The organisation has expressed an aspiration to achieve net zero by 2050 across its portfolio, or has an interim target aligned to this goal.

Partially aligned The organisation has a target to achieve net zero by 2050 across a small proportion of its portfolio.

Not aligned The organisation has made a commitment, pledge or is undertaking activities that will reduce portfolio emissions intensity but not in alignment with net zero by 2050, or the alignment is unclear due to insufficient information.

No emissions reduction targets or activities

The organisation has not disclosed any portfolio emissions reduction targets, commitments or activities.

TABLE 2: ASSESSMENT OF PORTFOLIO EMISSIONS REDUCTION COMMITMENTS AND ACTIVITIES

This assessment of portfolio emissions reduction activities and initiatives is informed by the pledges and commitments summarised in Table 4 (included in the appendix).

RSE Licensee Equity

(shares)2 Private equity

Fixed interests

Infrastructure Property Agriculture

and forestry

AMP Superannuation (N.M Superannuation)

■ o ■ ■ ★ o

AustralianSuper ■ ■ o ■ o o

Aware Super (First State Super) ☆ o o o o o

BT ■ o o o o o

CareSuper ■ o o o o o

Colonial First State Investments Limited

o o o o o o

Commonwealth Superannuation Corporation

o o o ■ o o

HESTA ★ ★ ★ ★ ★ ★

Hostplus ■ o o o o o

I.O.O.F. Investment Management

o o o o o o

Macquarie Investment Management Limited

■ o o ■ o o

Mercer Superannuation (Australia)

■ o o o o o

Nulis Nominees (Australia) o o o o o o

OnePath Custodians o o o o o o

QSuper ■ o o o o o

REST ■ o o o o o

Sunsuper ■ o ■ o o o

TelstraSuper ■ o o o o o

UniSuper ★ ★ ★ ★ ★ ★

United Super (Cbus) ★ ★ ★ ★ ★ ★

★ Net zero emissions target or aspiration that includes all assets within the investment category.

☆ Explicit emissions reduction commitment that is heading towards net zero.

■ Specific initiative that will reduce portfolio emissions intensity that is not heading towards net zero or alignment is unclear.

o Generic expression of intent or no information.

2 Engagement activities have been acknowledged as aimed at reducing portfolio emissions intensity within a portion of an organisation’s equity portfolio when this was explicitly stated.

NEXT STEPS

‘The reality is that things are coalescing fast

around us. We have the reality that all states

and territories in Australia have made

commitments, for instance.’

That was how chief investment officer Kristian

Fok described the context for Cbus’ new

commitments (Butler 2020). His comments

highlighted the sector’s growing awareness of

the emissions funded through their

investments – and the risks associated with

those emissions. As a result, many funds

have become increasingly proactive about the

decarbonisation of their portfolios.

In 2020, the ambition of climate action in the

sector has risen considerably, with three of

Australia’s largest superannuation funds

(Cbus, HESTA and UniSuper) committing to

transition their portfolios to net zero by 2050.

Cbus has also become the first Australian

financial institution to join the Net-Zero Asset

Owner Alliance, an international coalition of

institutional investors seeking to achieve the

global transition to net zero.

Full sectoral alignment to net zero by 2050

depends on other funds following these

examples – that is, setting their own portfolio

wide net-zero-by-2050 targets.

It should be noted that the methods by which

investors will achieve their targets remains to

be defined. That lack of clarity presents a

significant barrier for funds hesitating about

making their own commitments to a net zero

portfolio target.

In response, the Net-Zero Asset Owner

Alliance (NZAOA 2020) has outlined

methodologies and tools needed to support

net zero portfolio target setting and realisation.

These are being refined through work such as

the Science Based Targets methodologies for

financial institutions (SBTi 2020), the EU

taxonomy for sustainable activities (TEG

2019) and Network for Greening the Finance

System’s (NGFS) climate scenarios (NGFS

2020).

Through such activities, the members of the

Net-Zero Asset Owner Alliance are providing

leadership for the transition and defining the

terms on which it takes place. But that

leadership rests on their own commitment to

transition their portfolios to net zero by 2050.

More than half of the superannuation funds

considered in this report are pursuing

emissions reductions through engagement

with investees via initiatives such as Climate

Action 100+. In addition to involvement in this

initiative, the superannuation funds we

assessed to be ‘fully aligned’ with the goals of

the Paris Agreement have pledged to reach

net zero by 2050 across their entire

investment portfolios, setting an important

precedent for the sector. Achieving net zero

emissions for the super sector depends on

more Australian funds following this example.

In other words, by setting targets now,

superfunds create the context in which their

commitments become realisable. By

normalising net zero pledges, they bolster the

expectation those pledges will be kept and

spur the development of methods for sectoral

decarbonisation.

Case studies HESTA

HESTA manages about $52 billion in assets

for over 860,000 members, predominantly in

the healthcare sector. In June 2020, the fund

committed to reduce emissions funded

through its investment portfolio by 33 per cent

by 2030 and to net zero by 2050 (HESTA

2020). HESTA is the first Australian superfund

to set a net zero target for its portfolio and its

commitment set an important precedent for

the superannuation sector.

HESTA has stated its target will be supported

by a detailed Climate Change Transition Plan,

which will outline how the fund will manage

the risks and opportunities presented by

climate change so as to align investment

activities with ‘a below-two-degrees world’.

UNISUPER

UniSuper is a superfund for those working in

Australia’s higher education and research

sector. It has more than 450,000 members

and $80 billion in net funds under

management. In September 2020, the fund

committed to achieve net zero absolute

emissions in its investment portfolio by 2050

(UniSuper 2020).

To support this target, by 2021 UniSuper will

require all of its portfolio companies (in active

in-house Australian portfolios) to have 'Paris

aligned commitments'. These goals build on

an existing policy to exclude from

their portfolio companies that generate more

than 10 per cent of their revenue from thermal

coal.

CBUS

Cbus Super was established in 1984 to

service employees within the building and

construction industries (though it now allows

applications from all industries). As of 30 June

2020, it represented a total membership of

774,000 with $54 billion of funds under

management (Cbus 2020b).

In August 2020, the fund announced it would

cut emissions from its investments by 45 per

cent within the next 10 years as it committed

to achieve net zero emission by 2050, in line

with the Paris Agreement (Cbus 2020a).

Under a new Climate Change Roadmap,

Cbus is developing a ‘stranded assets

framework’. It seeks to identify the carbon

emissions associated with its investments,

acknowledging that many assets unable to

transition to net zero will not see out their

conventional economic life. Recognising that

different sectors of the economy will

decarbonise at different rates, it is establishing

pathways to achieve portfolio targets for each

class of assets.

Cbus has also joined the United Nations

Convened Net-Zero Asset Owner Alliance, the

first Australian financial institution to join this

important international coalition.

FURTHER RESOURCES

Initiatives relevant to financial institutions

seeking to align their portfolios with net zero

by 2050 are listed below:

● UN-convened Net-Zero Asset Owner Alliance (PRI 2020b) A growing coalition of investors (currently representing nearly $5.0 trillion of assets under management) pledging to transition their investment portfolios to net zero emissions by 2050.

● The Investor Agenda (Investor Agenda 2020b) Supports investors in setting portfolio emissions reduction targets that are consistent with achieving global net-zero emissions by 2050 or sooner. It provides a set of actions for investment, corporate engagement, investor disclosure and policy advocacy.

● IIGCC Paris Aligned Investment Initiative (IIGCC 2020a) An initiative examining how investors can align their portfolios with the Paris Agreement. The initiative’s draft Net Zero Investment Framework was published for consultation in August 2020 (IIGCC 2020b). It provides recommended actions, metrics and methodologies to assist investors in decarbonising their portfolios and increasing investment in climate solutions in line with 1.5°C warming scenarios.

● Science Based Targets (SBTi) methodologies for financial institutions (SBTi 2020) SBTi champions target setting based on commitments consistent with limiting global temperature rise to well below 2 degrees Celsius or 1.5 degrees Celsius above pre-industrial levels. It is developing a framework for setting Paris-aligned investment portfolio targets for real estate, mortgages, power generation project finance, equities, corporate bonds and corporate loans. It is anticipated that this framework will be finalised in the last quarter of 2020.

● Climate Action 100+ (Climate Action 100+ 2020) An investor coalition committed to engaging with significant emitters and companies with the opportunity to drive the clean energy transition. It seeks to ensure that they are minimising and disclosing the risks and maximising the opportunities presented by climate change and climate policy.

● Network for Greening the Finance System’s (NGFS) climate scenarios (NGFS 2020) The NGFS is a consortium of 42 central banks and banking supervisory authorities. It has published climate scenarios to provide a common framework for banks, governments, investors and regulators to assess climate risks associated with policy and investment decisions. The NGFS have pledged to continuously improve these scenarios to make them ‘as relevant as possible for economic and financial analyses.’

● EU taxonomy for sustainable activities (TEG 2019) A proposed economic classification system for environmentally sustainable activities, aligned with the EU’s sustainable policy objectives. It is designed to guide investment decisions on environmentally friendly economic activities to help drive capital towards sustainability objectives.

● The Paris Agreement Capital Transition Assessment (PACTA 2020): Open source IP rights free software that helps investors to assess the overall alignment of their portfolios with various climate scenarios and with the Paris Agreement, based on forward looking asset level company data. To date, the tool has been used by over 1,500 financial institutions with more than US$106 trillion in assets under management.

Appendix ORGANISATIONS AND DATA

The organisations considered by this analysis are the 20 largest Registrable Superannuation Entity

(RSE) Licensees, based on the value of assets under management, reported in APRA’s annual

fund-level superannuation statistics, June 2019 (APRA 2019).

Table 3 lists these organisations and data sources consulted. Tables 4 summarises the information

used to inform the analysis. The analysis considers published pledges and targets that support a

pathway to net zero emissions and other publicly available information regarding commitments and

initiatives to reduce portfolio emissions.

TABLE 3: COMPANIES AND DATA CONSIDERED BY THE ANALYSIS

RSE Licensee Total assets ($’000)

Funds under trusteeship

Main asset classes Memberships Sources

AMP Superannuation (N.M. Superannuation)

73,471,882 Future Directions Fund (Master Trust) Wealth Fund (Wrap platforms)

Australian shares International shares Property Fixed interest Cash Alternative assets (including private equity)

Climate Action 100+ PRI IGCC

AMP Capital- ESG and Responsible Investment Philosophy AMP Sustainability Report 2019 AMP Corporate Sustainability Website AMP Carbon Disclosure Project Report PRI Transparency Report 2020

AustralianSuper 172,409,105 AustralianSuper Australian equities International equities Private equity Infrastructure Property Credit Fixed income Cash Others

Climate Action 100+ PRI ACSI IGCC

2019 Annual Report Climate Change report 2020 2019 Sustainability Report Environmental, Social and Governance- Website

Aware Super (First State Super)

103,129,286 First State Superannuation Scheme

Cash International equities Australian equities Fixed income Property Private equity Infrastructure and real assets Credit income Other alternatives

Climate Action 100+ PRI ACSI IGCC

Annual Report 2019 media release - Time for superfunds to take immediate action against climate change: First State Super Climate Change Portfolio Transition Plan FSS Responsible ownership- Website Responsible Investment- Climate Change Position Statement [2014] Responding to Climate Change [2016] Responsible Investment: Environmental, Social & Corporate Governance Policy

RSE Licensee Total assets ($’000)

Funds under trusteeship

Main asset classes Memberships Sources

BT 93,213,920 Retirement Wrap ASGARD Independence Plan Division Advance Retirement Suite

Australian shares International shares Cash Fixed interests Property

Climate Action 100+ PRI IGCC

BT Funds Management Limited Annual Report 2019 BT Sustainable Investment approach 2019 BT Financial Group Stewardship Policy 2019 BT Website BTFG MySuper Environmental Social and Governance Policy 2017 BTFG Responsible Investment Position Statement BTFG Climate-related disclosures- Superannuation and Investments December 2018

CareSuper 19,915,651 CareSuper Australian shares International shares Property Infrastructure

Climate Action 100+ PRI ACSI

CSR Website Corporate Responsibility and Sustainability Policy- April 2019 Responsible Investing Policy- February 2020 Climate Change Position Statement -Website Sustainability Practices- Website PRI Transparency Report 2020

Colonial First State Investments Limited

86,837,976 Colonial First State FirstChoice Superannuation Trust Commonwealth Essential Super Colonial First State Rollover & Superannuation Fund

Cash Fixed Interest Australian Shares International Shares Property and Infrastructure securities Yield securities Alternatives

PRI IGCC

Colonial First State Investments Limited- Annual Report 2019 CBA Annual Report 2019

Commonwealth Superannuation Corporation

217,104,324 Australian Defence Force CSS Fund Military Superannuation & Benefits Public Sector Superannuation Accumulation Plan Public Sector Superannuation Scheme

Cash Fixed income Equity (shares) Property Infrastructure Private equity Hedge fund

IGCC Annual Report 2019 Annual Report 2019 - to members Stewardship: Sustainability through an investment lens Your super and climate change Our investment philosophy - Website Investment Options and Risk

HESTA 53,818,727 Health Employees Superannuation Trust Australia

Cash Global debt Property International shares Australian shares

Climate Action 100+ PRI ACSI IGCC

Annual Report 2018/19

RSE Licensee Total assets ($’000)

Funds under trusteeship

Main asset classes Memberships Sources

Infrastructure Private equity Alternatives

Hostplus 46,043,000 HOSTPLUS Superannuation Fund

Cash Fixed income Property Infrastructure Equity (shares) Private equity

PRI ACSI

Annual Report 2019 Our Investment Governance - Website Responsible Investment Policy 2020 PRI Transparency Report 2020

I.O.O.F. Investment Management

30,176,327 AvWrap Retirement Service IOOF Portfolio Service SMF Eligible Rollover Fund

Property Private equity Infrastructure Timber and Agriculture Fixed interests Infrastructure Cash Hedge funds

IOOF- Corporate Governance Statement 2019

Macquarie Investment Management Limited

22,713,920 Definitive Superannuation Plan Macquarie Superannuation Plan

Australian shares International shares Fixed interest Infrastructure Property Private equity

Climate Action 100+ PRI

Annual Report 2020 Macquarie Group FY20 ESG Equator Principles Implementation - October 2019 Macquarie and climate change TCFD implementation progress and scenario analysis-July 2020 MIRA- Infrastructure sustainability report- August 2020

Mercer Superannuation (Australia)

27,507,746 Mercer Portfolio Service Mercer Super Trust

Australian shares International shares Property Infrastructure Alternatives Fixed interest Cash

Climate Action 100+ IGCC

Annual Report 2019 Investing in a time of climate change. Mercer Investments Australia Limited- Climate change management reporting- September 2019 Sustainable Investment Policy 2020. Mercer Superannuation (Australia) Limited- February 2020 Responsible Investment- Website

Nulis Nominees (Australia)

103,232,405 MLC Super Fund MLC Superannuation Fund Premium Choice Retirement Service DPM Retirement Service

Cash Fixed interest Property Australian equity International equity Hedge funds Private equity

Nulis 2019 Annual Report Responsible Investment Policy (2018) -Nulis Nominees (Australia Limited) - MLC Super Fund and MLC Superannuation Fund MLC Super Fund Annual Report 2019 MLC Superannuation Fund Annual Report 2019 Premium Choice Annual Report 2019 DPM Annual Report 2019

RSE Licensee Total assets ($’000)

Funds under trusteeship

Main asset classes Memberships Sources

OnePath Custodians

39,351,565 One Path Masterfund Retirement Portfolio Service

Cash Property Fixed interests Australian shares International shares Private equity Alternative investments (hedge funds, structures credit, others)

OnePath Custodians -Financial Report 2019 IOOF- Responsible Investment Position Statement July 2020 IOOF- ESG Risk Management Policy: OnePath Custodians Pty Limited- April 2020 OneAnswer Investment Funds Guide

QSuper 115,308,453 QSuper Cash Fixed interest Equities Real estate Infrastructure Private equity Alternatives Commodities Other

Climate Action 100+ ACSI IGCC

Annual Report 2019 Investment Choice Guide 2020 SRI option- Website Investment Principles Investment Philosophy and Strategy 2009-18

REST 58,156,117 Retail Employees Superannuation Trust

Growth Alternatives (Credit) Infrastructure Bonds Cash Basic Cash Growth Alternatives (Agriculture) Property Overseas Shares Defensive Alternatives Growth Alternatives (Equity Strategies) Private Equity Australian Shares

PRI ACSI IGCC

Annual Report 2019 Investment Guide 2020 Climate Change Position Statement Rest’s approach to sustainable investing- Website

Sunsuper 72,584,595 Sunsuper Superannuation Fund

Australian shares International shares Private capital Property Diversified strategies Infrastructure Fixed interest Hedge funds and alternative strategies Cash

Climate Action 100+ PRI

2018-19 Annual Report Sunsuper Responsible Investment Report 2018-19 ESG Policy -August 2019 Environmental, social and governance reporting- Website

TelstraSuper 22,458,172 Telstra Superannuation Scheme

Australian shares International Shares Property Fixed Interest Cash Infrastructure

Climate Action 100+ PRI ACSI IGCC

Annual report 2019 Sustainable Investment Policy TelstraSuper Climate Change Statement

RSE Licensee Total assets ($’000)

Funds under trusteeship

Main asset classes Memberships Sources

Cash Private equity Credit Alternative debt

UniSuper 83,242,826 UniSuper Australian shares International shares Cash Fixed interests Property Infrastructure Private equity

Climate Action 100+ PRI ACSI IGCC

Annual Report 2019 Climate Risk and our investments 2019 Climate risk management and investments at UniSuper UniSuper website

United Super (Cbus)

53,168,127 Construction & Building Unions Superannuation (CBUS)

Australian shares Global shares Private equity Infrastructure Property Alternative debt Fixed interest Cash

Climate Action 100+ PRI ACSI IGCC UN- Net-Zero Asset Owner Alliance

Cbus Annual Report 2019 Cbus- Built on trust- Responsible Investment Supplement 20190 Cbus Website

PLEDGES AND COMMITMENTS

TABLE 4: PORTFOLIO EMISSIONS REDUCTION COMMITMENTS AND ACTIVITIES

RSE Licensee Portfolio emissions

reduction targets Portfolio emissions reduction activities Engagement

Responsible investment

options

AMP

Superannuation

(N.M.

Superannuation)

AMP Capital managed

Real Estate funds aim to

be zero net carbon by

2030 for Scope 1 and 2

emissions and by 2040

for material scope 3

emissions

AMP Capital Real Estate target will be achieved through

phasing out fossil fuels, running on 100% renewable

energy, making buildings highly efficient and working with

the tenants.

The Superannuation Trustee has formally adopted the

AMP Capital ESG Investment Philosophy and includes an

ESG overlay as part of the due diligence process for the

appointment and review of investment options.

Assessing the ESG performance of AMP Capital

investments, through dedicated investment specialists.

9% of AMP Capital’s AUM invested in environmentally

and socially themed areas. 29% of infrastructure AUM

invested in environmentally and socially themed areas.

Monitoring companies and assets, and

encouraging improved recognition of ESG

considerations in business policies, practices

and disclosures. Engagement is one of the

preferred approaches to influence an

investment’s performance. AMP Capital

engages directly with companies and

policymakers on climate change and also

through a range of initiatives.

Early signatory of UN-PRI and Climate Action

100+ participant.

AMP retail clients have

access to a wide range of

investment options, which

includes the low carbon

funds offered by AMP

Capital.

MyNorth Sustainable

Managed Portfolio offers

responsible investing

(available through an

adviser).

AustralianSuper No information Within the energy sector, AustralianSuper plans to invest

around $1 billion in renewables via the equity and

infrastructure portfolios, and expect this to grow over time.

Endorse the adoption of the Taskforce on Climate-related

Financial Disclosure frameworks (TCFD)

recommendations by companies.

AustralianSuper has identified the pathways to a low

carbon portfolio in its TCFD report. Tracking the carbon

intensity of the portfolio; international equities portfolio is

currently 44% less carbon intensive than the benchmark

and the Australian equity portfolio 17% less carbon

intensive.

Has been awarded an A+ rating for its Overarching

Approach to Responsible Investment and Listed Equity-

AustralianSuper is a founding member of

Climate Action 100+ (CA100+), the current

global chair and a member of the global

steering committee.

Actively engaging with companies on their

alignment to Net Zero 2050, the risks relating

to future fossil fuel consumption and physical

changes in climate.

Comprehensive company engagement

program, both directly and collaboratively with

other investors.

AustralianSuper is a founding partner of the

Australian Industry Energy Transition Initiative,

working directly with companies to reduce

The Socially Aware

option removes

investment in companies

that own fossil fuel or

uranium reserves.

RSE Licensee Portfolio emissions

reduction targets Portfolio emissions reduction activities Engagement

Responsible investment

options

Active Ownership in the UN’s Principles for Responsible

Investment (PRI) Global Assessment Report 2020.

supply chain emissions in hard to abate

sectors.

Aware Super

(First State

Super)

The Fund will seek to

transition our investment

portfolio towards carbon

neutrality, which means

achieving net zero

emissions by 2050.

Aims to reduce emissions

in its listed equities

portfolio by at least 30%

by 2023.

The Fund will actively

advocate for an

economy-wide 45 per

cent reduction in

greenhouse gas

emissions by 2030 and is

looking to replicate this in

its portfolio in the same

timeframe.

Aware Super will divest from thermal coal miners from

October 2020 as part of a comprehensive plan to respond

to climate change risks (for companies with more than

10% of their revenue from thermal coal mining).

Also excluding companies that source more than 20% of

their operational revenue from coal, oil and gas.

Where practicable, aiming to: incorporate climate change

into the consideration of its investments across asset

classes, whether managed internally or externally;

requesting disclosure of investment managers’ policies on

climate change.

The RI team has been developing and

implementing a direct engagement program

across select areas of the portfolio.

Engagement has focussed on 4 key areas:

Listed equities engagement; Climate Action

100+ investor engagements; Investment

manager engagement; Directly owned asset

engagement.

Aware Super offers two

investment options that

allow members to invest

their superannuation in

companies that engage in

socially responsible

practice:

- a diversified option, and

- a single asset class

Australian equities option.

Exclusions of these

options include thermal

coal mining and fossil

fuels.

BT No information Committed to:

- Considering climate-related impacts in investment

decision making.

- Working to understand and assess how climate-related

impacts in the investment portfolios will develop over time,

and taking this into account when making strategic

decisions on behalf of its customers.

- Ensuring company engagement and proxy voting

activities consider climate–related impacts material to the

companies in which they invest.

BT is engaging with the companies it has

invested in to achieve positive change in areas

such as sustainability and disclosure to

improve long-term shareholder value.

Engagement can also involve discussions with

regulators, professional bodies and other

entities.

Engaging through BT’s external portfolio

managers, in their direct discussions with

companies and encouraging them to consider

climate risk in their investment process.

The corporate

superannuation products

give members the choice

of socially responsible

and ethical funds,

including: BT Ethical

Share Fund; and BT

Sustainable Share Fund.

RSE Licensee Portfolio emissions

reduction targets Portfolio emissions reduction activities Engagement

Responsible investment

options

- Calculating carbon intensity metrics for its portfolios and

to provide customers with climate-related information.

BT plays an active role in collaborative

engagement efforts, such as Climate Action

100+.

CareSuper No information ESG performance minimum threshold set for listed

equities: The fund’s sustainable listed equity managers

target better ESG and carbon performance than their

respective benchmarks.

Investments include those that should prove resilient to

the impacts of climate change and/or will benefit from the

transition to a low-carbon economy.

Require investment fund managers across all asset

classes to comply with CareSuper’s Responsible

Investing Policy.

Engage with investee companies on ESG

(including climate change) via investment

managers as well as collaborative initiatives.

Engage regularly with investment managers to

understand how they integrate ESG and other

risk factors into their research and decision-

making.

Offering investment

choices that allow

members to avoid or

reduce their exposure to

thermal coal investments

through the Sustainable

Balanced and the Direct

Investment options.

Colonial First

State

Investments

Limited

No information Monitors emissions both at portfolio level and

across Colonial First State Investments Limited (CFSIL).

Climate and carbon metrics are factored into decisions

when making portfolio changes.

Aims to manage, reduce and/or mitigate the ESG and

climate risks of each portfolio over time and where

appropriate.

Encourages investment managers to engage

with the company management or collaborate

with other investors in an engagement. These

issues may relate to climate change, human

rights, environmental and resource

management amongst others.

As a PRI signatory, Colonial First State also

use the PRI’s collaboration platform.

No information.

Commonwealth

Superannuation

Corporation

No information Over A$676 million invested in high-quality private and

public assets- including wind farms, waste management

infrastructure projects, and renewable energy initiatives

that add to the net new supply of facilities (as at 30 June

2019) .These investments reduce our portfolio carbon

emissions by over 200,000 tonnes of CO2 per annum.

Comprehensively considering which companies will

benefit from transition to a lower carbon world. Will

continue to assess all risks and opportunities arising from

climate change.

Managing climate investment risk in three main ways by:

investing in renewable energy opportunities, supporting

We engage and work with a diverse group of

investment managers, advisers and

shareholder groups, to leverage scale in the

promotion of ESG awareness, integration and

continuous improvement.

No information

RSE Licensee Portfolio emissions

reduction targets Portfolio emissions reduction activities Engagement

Responsible investment

options

robust transitions away from coal, and improving its net

portfolio carbon footprint over time.

HESTA Committed to reducing

the absolute carbon

emissions in its

investment portfolio by

33% by 2030 and to be

‘net zero’ by 2050

Committed to remove all investment in carbon emissions

by 2050. First major Australian superfund to place a

thermal coal mining restriction across all investment

options.

Committed to reducing our environmental impact by

activities including: investing members’ super responsibly,

choosing key suppliers that share HESTA’s focus on

sustainability and minimising our carbon footprint.

Co-filed a shareholder resolution at BP’s AGM,

requiring the firm to align its investment

program with goals within the Paris Climate

Change Agreement.

Will be engaging with a number of asset

managers to discuss physical risks stemming

from climate change, and how they can

mitigate its impact on infrastructure and real

estate.

Climate Action 100+ participant.

Eco Pool: A socially and

environmentally

responsible option.

Invests in companies with

superior environmental,

social and governance

performance as assessed

by HESTA’s managers.

Exclusions include fossil

fuels.

Hostplus No information Climate change risks are taken into account to the extent

they are relevant to the Fund’s overall investment strategy

and investment portfolio.

Committed over $1 billion to Australian venture capital

managers, including funds that are building water

treatment systems, autonomous taxis and cars, and

supporting clean energy funds that create new ways to

produce, store, distribute, own and trade renewable

energy.

The Trustee stress tests Hostplus’ investment strategy for

numerous scenarios, including scenarios which consider

climate change. These help to inform decisions around

the appropriate investment strategy.

Hostplus’ ESG approach is a preference for

engagement with, over divestment from, an

asset class, industry, sector or company.

Maximising ability to constructively engage

with multiple companies by engaging with

companies collectively through the Australian

Council of Superannuation Investors (ACSI).

Hostplus is a founding member of ACSI.

Socially Responsible

Investment (SRI) option

offered to members. This

option has a range of

exclusions including

investments in thermal

coal miners.

I.O.O.F.

Investment

Management

No information Reviewed approaches to the measurement and scoring of

portfolios against the Responsible Investing Statement of

Principles and its rolling out an investment database

system (Factset) capturing individual security holdings of

its investment managers, which once complete (expected

in FY 2020) will assist the monitoring exposure to ESG

sensitive sectors and score funds on carbon exposure

and other dimensions of Responsible Investing.

Engaging with managers, to evaluate the

extent of ESG integration in their portfolios and

ensure risk is managed appropriately.

No information

RSE Licensee Portfolio emissions

reduction targets Portfolio emissions reduction activities Engagement

Responsible investment

options

Macquarie

Investment

Management

Limited

No information $A2.0b assets managed under MIM’s targeted

Responsible Investment strategies.

$A3.2b funds managed in line with MIM’s clients’ specific

ESG goals and screening preferences.

Macquarie has:

- $A9.0b invested or arranged in renewable energy and

energy efficiency projects in FY2020.

-12,800 MW of renewable energy assets in operation or

under management at 31 March 2020.

- 13.6% of total funded equity investments exposed to

renewable energy at 31 March 2020.

Macquarie Infrastructure and Real Assets: aiming to

reduce the greenhouse gas (GHG) emissions intensities

of the existing infrastructure portfolio over time. New

products include two renewables funds dedicated to

investment in renewable energy.

Committed to engaging with investors on ESG

issues.

Macquarie Investment Management’s Equity

and Fixed Income Investment teams have

access to ESG analytical tools that provide

insight into portfolios’ carbon footprint, allow

them to stress-test issuers and portfolios for

different carbon pricing scenarios, and offer

guidance.

Climate Action 100+ signatory.

Macquarie Investment

Management (MIM)

manages several

strategies for which ESG

is core to the investment

process. An overview of

these strategies is

available upon request.

MIM can create portfolios,

mandates and

segregated accounts,

based on specific client

requests that aim to align

their organisation or

personal values with their

investments.

Mercer

Superannuation

(Australia)

No information The assets of the Mercer Super Trust, are invested in

funds managed by Mercer Investments (Australia) Limited

(MIAL). MIAL has completed climate scenario modellings

and is integrating findings into asset allocation and

portfolio construction decisions. MIAL will increasingly

align portfolios with a 2°C scenario where consistent with

investment objectives.

Includes a small exposure to Mercer Sustainable

Opportunities (infrastructure, private equity and natural

resources) which allocates to environmental themes

including renewable energy, energy efficiency, waste,

water, together with robust impact reporting.

Mercer participates in collaborative industry

initiatives, including Climate Action 100+.

Includes climate change in manager

engagement activity. Request information on

manager views on material ESG issues and

how they are considering these in investment

analysis and portfolio construction (all asset

classes).

Communicate with companies directly on

occasion.

Offers seven Socially

Responsible Investment

options to choose from,

with the exclusions list

including other activities

beyond fossil fuels.

Mercer’s SRI Fund in

Australia won’t invest in

companies with more

than 10% revenue in

carbon intensive fossil

fuels and targets 20%

below benchmark carbon

footprint results.

Nulis Nominees

(Australia)

No information There are currently no Fund wide exclusions, though

future exclusions are to be considered as part of the

annual review of Nulis Responsible Investment policy.

Believes that appropriate engagement with

investment entities promotes their

consideration of ESG factors resulting in

improved practices and strategic decisions.

Will seek to provide

socially responsible

investment options that

allow members to have

RSE Licensee Portfolio emissions

reduction targets Portfolio emissions reduction activities Engagement

Responsible investment

options

Each Investment Manager is expected to

engage with investee companies on ESG

matters, where appropriate.

Aims to be an active participant in the

responsible investment industry. This includes

participation in industry forums, engagement

with industry bodies and the completion of RI

surveys.

their superannuation

invested into dedicated

responsible investment

options, generally

seeking to avoid

companies deemed

harmful to society or the

environment.

MLC Super Fund and

MLC Superannuation

Fund currently include

several socially

responsible investment

options.

OnePath

Custodians

No information Assessing the carbon footprint of its portfolios to identify

sources of carbon risk.

Carbon footprint and climate change: engaging

closely with underlying managers to assess

their ability to incorporate and appropriately

value the long-term implications of climate

change on company holdings.

OnePath Sustainable

Investments, Perpetual

Ethical SRI and Stewart

Investors WorldWide

Sustainability Options

take into consideration

ESG factors.

QSuper No information QSuper considers ESG within a framework focused on

providing competitive returns for our members.

Climate Action 100+ participant. Socially Responsible

Investment option: seeks

investments in areas as

Clean Energy,

Conservation and the

environment, Waste

reduction and recycling,

and Green building.

Avoids investments in

fossil fuels.

REST No information Preparing to measure the carbon footprint of our equity

portfolio.

Climate change issues are factored into our asset

allocation and strategy-review processes.

Sole owner of the Collgar Windfarm, Western Australia’s

largest renewable energy project.

Working with investment managers,

investment adviser, and the Australian Council

of Superannuation Investors (ACSI) to engage

with companies and entities, and to improve

disclosure of climate change risks and

opportunities.

No information

RSE Licensee Portfolio emissions

reduction targets Portfolio emissions reduction activities Engagement

Responsible investment

options

Sunsuper No information We support the goals of the Paris Agreement and actively

encourage companies to improve their climate risk

readiness.

Activities in 2018-19 included: measuring the carbon

footprint of listed shares portfolio, assessing property and

infrastructure investments against the Global Real Estate

Sustainability Benchmark (GRESB) Assessment, and

conducting climate scenario analysis on our Balanced

option.

Through investing in green bonds, Sunsuper is able to

simultaneously generate a financial return for members

and help finance the transition to a low carbon economy.

In 2019, Sunsuper invested in the Affirmative Investment

Management Global Impact Bond Strategy as its first

dedicated green-bond manager in the Fixed Income

portfolio.

Climate Change is an area of activism for

Sunsuper. Sunsuper collaborates with other

global investors and engages with

stakeholders, managers, and both listed and

unlisted investee entities on this issue.

Sunsuper believes that engaging widely on

ESG issues will improve behaviours, promote

best practice and lead to better understanding

of business and strategic decisions.

Sunsuper’s engagement program will involve

both direct and collaborative activities.

Climate Action 100+ participant.

Sunsuper’s Socially

Conscious Balanced

option invests in

companies that limit its

material exposure – that’s

no more than 5 per cent

of its total revenue – to

several industries

including: fossil fuel

explorers, miners or

energy generators.

TelstraSuper No information Actively investing in industries that we feel do have good

ESG credentials. Actively invest in clean energy

infrastructure opportunities such as wind and solar

electricity generators.

The projects TelstraSuper is invested in, include:

AGL renewable energy sources in Australia, and Wind

and solar portfolios globally

TelstraSuper believes that advocacy and

engagement are important avenues for

effecting change. TelstraSuper is a member of

the Australian Council of Superannuation

Investors (ACSI), a signatory to the Principles

for Responsible Investment (PRI) and a

signatory to Climate Action 100+. TelstraSuper

proudly supports the engagement and

advocacy activities of these organisations.

No information.

UniSuper At a whole-of-fund and

portfolio level, achieve

net zero absolute carbon

emissions by 2050.

100% of portfolio

companies (material,

active, in-house

Australian investments) to

have Paris-aligned

operational commitments

by the end of 2021.

Factoring decarbonisation as a core investment theme in

all portfolios:

- Applying a shadow carbon price to material investments

that UniSuper expects to hold for the medium to long

term.

- Excluding companies that generate more than 10% of

their revenues from thermal coal mining.

2030 pathway includes:

- Allocating capital to companies needed to achieve the

ultimate goal of net zero.

Undertaking extensive engagement and a

range of advocacy activities. Discussing

emission reduction targets and strategies with

100% of UniSuper’s portfolio companies

(material, active, in-house Australian

investments) at management and board levels.

The investment team has close engagement

with Australian corporates, and collaborates

with climate-focussed action groups, including:

Climate Action 100+ and Investor Group on

Climate Change.

Provides three

sustainable and

environmental options for

members: Sustainable

balanced, Sustainable

High Growth and Global

Environmental

Opportunities. These do

not invest in fossil fuel

exploration.

RSE Licensee Portfolio emissions

reduction targets Portfolio emissions reduction activities Engagement

Responsible investment

options

Contribute to a 45%

reduction in Australia’s

emissions by 2030.

UniSuper will target an

absolute reduction in

emissions at a portfolio

level by 2030 where

practical (with net zero

unlisted property and

infrastructure portfolios by

2030).

United Super

(Cbus)

Portfolio target

committing to net zero

greenhouse gas (GHG)

emissions reductions by

2050.

Targeting a portfolio

reduction of 45%

absolute emissions

reduction by 2030.

Cbus has joined the United Nations Convened Net-Zero

Asset Owner Alliance.

Introducing a dedicated climate opportunities investment

strategy representing 1% of our total portfolio.

An analysis of Cbus’ carbon footprint contributed to the

decision to re-weight the portfolio by 8.1% to global

shares. This contributed to this year’s reduction in

emissions.

In March 2019, Cbus’ CEO was appointed to the steering

committee of the Australian Sustainable Finance Initiative.

A new target has been set for the infrastructure fund

managers to commit to net zero carbon emissions.

Committing to net zero carbon emissions for the property

portfolio by 2030.

Infrastructure team has invested in renewable assets in

Australia, and Cbus Property is one of the global leaders

in green commercial construction.

Proactively seek opportunities to invest in the transition

and to improve portfolio resilience to climate change by

mitigating exposure to risk.

2019 Progress: 100% of companies have been

engaged through ACSI and Climate Action

100+

80% of the companies are reporting against

the TCFD.

Engaging with the most intensive fossil fuel

companies with other asset owners through

‘Climate Action 100’ and ACSI.

No information

ASSESSMENT OF EMISSIONS-REDUCTION AMBITION

Table 5 details the assessment of emissions reduction ambition for each of the organisations considered by the analysis. This assessment considers commitments and activities that address

emissions financed by each organisation’s investments. It is informed by the assessment of portfolio emissions reduction activities and initiatives outlined in Table 2, and the pledges and commitments summarised in Table 4. This assessment is based on the following criteria:

Net zero target? Indicates whether an organisation has set a net zero emissions target across its portfolio (Yes), has set a net zero target for only a portion of its portfolio (Partial), has expressed an aspiration to achieve net zero emissions (Aspiration) or no information can be found regarding a net zero target (No).

Interim emissions reduction target?

Indicates whether an organisation has defined an interim emissions reduction target across its portfolio (Yes), has set an interim emissions reduction target for a portion of its portfolio (Partial) or no information can be found regarding an emissions reduction target (No information).

Emissions reductions activities?

Indicates whether an organisation has a commitment or is undertaking activities that will reduce its emissions.

Based on the above criteria, each organisation’s emissions reduction ambition was

assessed as follows:

★ Fully aligned The organisation has a target to achieve net zero by 2050 across its entire portfolio, supported by a strategy and/or interim targets.

☆ Closely aligned The organisation has a target to achieve net zero by 2050 across a significant proportion of its portfolio, supported by a strategy and/or interim targets.

■ Aligned aspiration/pathway

The organisation has expressed an aspiration to achieve net zero by 2050 across its portfolio, or has an interim target aligned to this goal.

▲ Partially aligned The organisation has a target to achieve net zero by 2050 across a small proportion of its portfolio.

● Not aligned The organisation has made a commitment, pledge or is undertaking activities that will reduce portfolio emissions intensity but not in alignment with net zero by 2050, or the alignment is unclear due to insufficient information.

o

No emissions reduction targets or activities

The organisation has not disclosed any portfolio emissions reduction targets, commitments or activities.

TABLE 5: ASSESSMENT OF EMISSIONS-REDUCTION AMBITION

RSE Licensee Total assets

($’000)

Portfolio

net zero

ambition

Net Zero

target?

Interim

emissions

reduction

target?

Emissions

reduction

activities?

UniSuper $ 83,242,826 ★ Yes Partial Yes

HESTA $ 53,818,727 ★ Yes Yes Yes

United Super (Cbus) $ 53,168,127 ★ Yes Yes Yes

Aware Super (First

State Super) $ 103,129,286 ■ Aspiration Partial Yes

AMP Superannuation

(N.M. Superannuation) $ 73,471,882 ▲ Partial No information Yes

Commonwealth

Superannuation

Corporation

$ 217,104,324 ● No information No information Yes

AustralianSuper $ 172,409,105 ● No information No information Yes

QSuper $ 115,308,453 ● No information No information Yes

BT $ 93,213,920 ● No information No information Yes

Sunsuper $ 72,584,595 ● No information No information Yes

REST $ 58,156,117 ● No information No information Yes

Hostplus $ 46,043,000 ● No information No information Yes

Mercer Superannuation

(Australia) $ 27,507,746 ● No information No information Yes

Macquarie Investment

Management Limited $ 22,713,920 ● No information No information Yes

TelstraSuper $ 22,458,172 ● No information No information Yes

CareSuper $ 19,915,651 ● No information No information Yes

Nulis Nominees

(Australia) $ 103,232,405 o No information No information No information

Colonial First State

Investments Limited $ 86,837,976 o No information No information No information

OnePath Custodians $ 39,351,565 o No information No information No information

I.O.O.F. Investment

Management $ 30,176,327 o No information No information No information

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Responsibility (ACCR) 2019, Vote Line You

Mean It: A study of the proxy voting records

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Vote-Like-You-Mean-It-2019-FINAL.pdf

Australian Council of Superannuation

Investors (ACSI) 2020, viewed 25 August

2020, https://acsi.org.au/

Australian Prudential Regulation Authority

(APRA) 2019, Annual fund-level

superannuation statistics June 2019, viewed

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<https://www.apra.gov.au/annual-fund-level-

superannuation-statistics

Australian Prudential Regulation Authority

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https://www.apra.gov.au/myths-and-

misconceptions-should-be-no-barrier-to-

super-consolidation

Australian Prudential Regulation Authority

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a timeline, viewed 11 August 2020,

https://www.apra.gov.au/superannuation-

australia-a-timeline

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managing the financial risks of climate

change, viewed 27 August 2020,

https://www.apra.gov.au/understanding-and-

managing-financial-risks-of-climate-change

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